Yes, if you write the decrypted file to disk, it could be recovered. Deleting files only removes the file system entries - it does not wipe the content.
Use a local password manager. KeePass (use the KeePassXC variant on Linux) is the most popular choice. If you prefer a command line tool, pass (passwordstore.org) is an option.
There is a projekt out there that offers a more human-readable language that compiles to plain regex.
The main issue of this would be public defamation, i.e. wrongfully portraying someone as porn actor which might destroy their career. You cant really do that with written or drawn fiction.
But for that the pictures would have to be photorealistic, which is not the case just yet. But the tech is going to improve plus the generated images could be further manipulated (i.e. add blur/noise to the image to make it look like a bad phone picture).
Oh yeah. At least they got the total amount of toes correct.
I did try out one of those image generators. Wanted a picture of two girls making out in the bathroom. The index finger of one girl was grown together with the collarbone of the other one.
I think they covered it with black foam, because they do not want to reveal what camera they use.